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A Summary of FTB’s Nonresident Withholding Process

If you pay California source income to nonresidents of California, with certain limited exceptions, you must withhold and send us 7 percent of all payments that exceed $1,500 in a calendar year. ( Revenue and Taxation Code Section 18662)

The charts below explain when and how to use the forms, and who has responsibility for them.

Use the forms in the charts for either of the following:

  • California source income payments to foreign or domestic nonresident payees.
  • Distributions to domestic nonresident partnerships and limited liability companies.

For information about withholding on allocations to foreign partnerships and limited liability companies see Withholding on Partnerships and Limited Liability Companies.

For complete details, see the applicable withholding forms and publications with instructions.

Before making payments


Forms to use…


Before payer makes payment to nonresident payee

Form 590, Withholding Exemption Certificate

Payee who is a California resident or a business with resident status can use Form 590 to certify exemption from nonresident withholding. No withholding required with a valid withholding exemption certificate.

Form 588, Nonresident Withholding Waiver Request

Nonresident payee who qualifies can use Form 588 to get a waiver from withholding based generally on California tax filing history. Payer keeps a copy of the determination letter in records. No withholding required with a determination letter.

Form 589, Nonresident Reduced Withholding Request

Nonresident payee can use a paper or electronic Form 589 to itemize expenses against the California source income. FTB provides payer with a letter stating the reduced withholding amount.

Form 587, Nonresident Withholding Allocation Worksheet

Nonresident payee can use Form 587 to allocate California source payments to determine if withholding is required on payments made by payer. Payer keeps a copy of Form 587 in records.

At the time of making payments


Forms to use…


At the time payer makes payment to nonresident payee

No FTB forms to use, but payers use their own internal processes for withholding.

Payer withholds 7 percent of all California source payments to a nonresident payee that exceed $1,500 in a calendar year, unless payee qualifies for reduced or waived withholding.

After making payments


Forms to use…


After payer makes payment to nonresident payee

Form 592, Resident and Nonresident Withholding Statement

After making a payment to a nonresident payee, payer sends FTB a timely Form 592, either electronically or by mail. Form 592 contains a list of all payees withheld upon during the filing period.

Form 592-V, Payment Voucher for Resident and Nonresident Withholding

Payer sends FTB a Form 592-V with remittance of withholding and a completed Form 592.

Form 592-B, Resident and Nonresident Withholding Tax Statement

By January 31 following the end of calendar year, payer sends each nonresident payee a completed paper or electronic Form 592-B and keeps a copy for records. Nonresident payee claims the withholding by attaching a copy of Form 592-B when filing California tax return. Form 592-B is proof of California source income and withholding.

Backup withholding

With certain limited exceptions, we require payers who remit backup withholding to the Internal Revenue Service (IRS) to also withhold and remit to us. (R&TC Section 18664)

Payers backup withhold when a payee submits an IRS Form W-9 that:

  • Does not provide a taxpayer identification number (TIN).
  • Provides an invalid TIN.
  • Fails to certify exemption from backup withholding.

Source of income

  • Backup withholding applies to California residents and nonresidents not providing a TIN.
  • Nonresidents are subject to California backup withholding on payments received from California source income.


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